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A Look Back at Trucking Fleet Trends
It’s been a roller coaster year for the commercial trucking industry. As we get close to wrapping up 2018, it’s a good time to take a look back at the challenges and opportunities that trucking companies have faced and examine how telematics technology can help as 2019 approaches.
The good news is that shipments and revenue were up as we kicked off the year. According to the American Trucking Associations (ATA), truckers moved more than 70.2% of all domestic freight tonnage in 2017, helping the industry reach $700.1 billion in annual revenue by the start of 2018.1 In addition to increased profits, the past year had the industry seeing an increase in truck orders, which may be surprising some given the issues commercial truckers faced.
But despite the positive news about increased revenue and truck orders, perhaps an indicator of what leaders are expecting in the coming year, the year was not absent of challenges, including the full implementation of the ELD mandate, a continued driver shortage and lingering capacity issues that left many trucking companies fighting an uphill battle.
Whether fleets are facing increased workloads and the challenges that can come with managing more work with existing staff and fleets, or continuing issues related to ELD compliance, telematics technology can help businesses both alleviate these challenges and capitalize on the opportunity by investing in digital transformation. GPS tracking/navigation and e-log tools can help reduce stress, maintain compliance in the face of an ever-changing regulatory environment and help reduce costs while encouraging safe driving. But before we delve into the benefits of a fleet tracking solution in more detail, let’s take a closer look at the trending obstacles and opportunities that trucking companies faced throughout the past year.
Current challenges: Truckload capacity, driver shortages and ELD
Truckload capacity
According to Averitt Express’ 2018 study, State of the North American Supply Chain, diminishing truck capacity was labeled as the industry’s “primary hurdle” in 2018 (considering that in 2017, approximately 20% of truckers faced capacity issues, double the number from 2016). In fact, 76% of freight operators expected their volumes to continue to increase.2
The Averitt study was completed before the record-breaking winter storm season of 2018, which halted deliveries and stranded drivers, making capacity issues an even bigger problem as carriers struggled to catch up. To make matters worse, ELD compliance hit full tilt this past year. According to the Journal of Commerce, “Trucking capacity was tightening faster than anticipated in the electronic logging area, as a messy start to the electronic logging device (ELD) mandate forced shippers to pay more, speed up loading and unloading, and dig deeper into routing guides to find capacity.”
The driver shortage
The driver shortage has persisted through 2018, making resource allocation difficult for many trucking companies. According to the Department of Labor, the number of active truckers in the U.S. decreased to 3.506 million in 2017, a decrease of 36,000, or 1%, from 2016 (prior to last year, the number of truck drivers had increased annually since 2011).3 And the ATA recently estimated that the national shortage of truck drivers could continue – growing to more than 174,000 by 2026.4
What are some of the causes behind the ongoing lack of truckers? As outlined by Forbes.com, the shortage is being driven by a number of factors, a few of which include:
- Lower unemployment rates are leading to a more positive consumer outlook and, by extension, an increase in the purchase of goods.5
- Truck driver demographics have shifted. “In the past, 10% of drivers were near retirement at any point in time, while today it’s 25%."5
- Costs have increased, and since carriers can’t control fuel prices, in recent years many have had to increase driver wages to keep pace with other sectors.5
- ELD regulations have put more limitations on the hours a trucker can drive.
The ELD Mandate
As predicted by many leading up to the ELD deadline, the compliance mandate did have an impact on productivity and costs. According to a DAT Trendlines report, “Truck capacity fell 2.7% the first week of April when compared to the last week in March. In addition, truck capacity dropped 7% year-over-year.”6
However, though the ELD mandate remains an industry challenge, it has proven to be a positive change, despite the disruption it has caused. As the Federal Motor Carrier Safety Administration (FMCSA) points out, “ELDs are working – hours of service violations have dropped significantly.”7 And, ultimately, 47% of companies think that the ELD mandate is good for the transportation industry.8
An emerging opportunity: Increasing truck orders
With the economy on a positive upswing, the demand for trucks to deliver goods is overwhelming. Nervousness from commercial fleets and a hope to avoid facing the same issues in 2019 as they did this year is driving an unprecedented uptick in in both Class 8 truck orders and trailer orders.
According to Freight Transportation Research Associates (FTR), “the third quarter of 2018 decisively set a new historical record with 146,800 Class 8 orders” and showed the best September on record. In addition, “North American Class 8 orders for the past 12 months have now totaled 497,000 units.”9
On top of record-breaking Class 8 orders, trailer orders have also broken records in 2018. As one ACT representative is quoted on FleetOwner.com, “OEMs had their strongest July net order volume in history, breaking a record that was set in 1994. Net orders were 102% better than last July and 45% above June volume. Considering July is, historically, the industry’s weakest order month, this performance is truly exceptional. Year-to-date, net orders of just over 200,000 trailers are up 30% from 2017.”10
This order boon holds great promise for the fleet industry as an indication that things are turning around. But unless commercial trucking operations can get out in front of the challenges that still plague the industry, this positive development could turn into a negative one. That is, unless company owners embrace the benefits that telematics solutions can have on all facets of operations.
The benefit of telematics
Say “hello” to smoother compliance
Commercial trucking fleets need to stay up-to-date with rapidly changing legislation, from Hours of Service (HOS) tracking, including the new ELD requirement, to DVIR and IFTA reports and size or load route restrictions. That’s where streamlining and automation can help, especially given that e-logs are now mandatory for drivers who record HOS.
The right compliance software allows drivers to use a mobile device to make easy work of DVIRs and hours tracking. It also provides spoken turn-by-turn directions following truck legal routes, from which accurate IFTA reports can be prepared using the GPS tracking data generated by the fleet. In the end, streamlining compliance recordkeeping and removing the bulk of the paperwork burden from drivers makes their lives easier, which in turn helps trucking companies retain their workforce and attract new talent amidst the growing shortage.
Say “goodbye” to high fuel costs
With capacity tight and fuel prices rising, every bit of fuel saved can have a big impact on commercial fleets; and telematics technology can help. With a GPS tracking solution, trucking fleets can save an average of up to 25%4 on their annual fuel spend and also:
- Realize secure fuel card integration and access to network discounts
- Achieve fuel card fraud protection to prevent theft
- Report on a vehicle’s MPG to identify fuel waste
- Coach drivers to be smart about fuel use
- Minimize unnecessary idling
- Reduce out-of-route miles or unauthorized use
- Provide accurate last-mile navigation, right to the loading dock
Looking to 2019: Efficiency, safety and productivity will be a win for fleets
As we come close to the end of the year, commercial drivers will continue to face challenges on the job and trucking companies will still be pressed to maximize resources, streamline operations, cut costs and maintain compliance.
But there’s hope on the horizon – in the form of next-generation GPS tracking technology. By investing in telematics, companies can achieve enhanced safety and increased productivity that can help to retain drivers, boost recruitment and, ultimately, positively impact their bottom line.
Learning more about how fleet tracking solutions can help your commercial trucking company flourish in the face of industry challenges.
Sources
4 Benefits After Effective Deployment of Fleet Management System” Frost & Sullivan 2015
6 https://www.trucks.com/2018/04/12/eld-enforcement-soaring-freight-rates/
9 https://www.fleetowner.com/economics/september-sets-another-class-8-order-record
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